No need to say it, it goes without saying, it should be obvious to all but,
just in case it isn't obvious to all,
IDA is dead.
IDA, now known as "GOV.UK Verify (RIP)",
is the Cabinet Office Identity Assurance programme.
And it's dead.
Let's say that you're a venture capital person. In that case you'll know that 95% of the ventures you invest in bomb. For £95 out of every £100 that you invest, there's nothing to show for it. You lose your money. It's gone.
Just to break even, the other £5 has got to return £100. Your investment has to appreciate by a factor 20. After tax. After all investment costs. Such as hiring the Four Seasons Hotel in Hampshire for the day. That's not cheap.
But what's the point of breaking even? You can do that by not investing in the first place. The idea is to make a profit.
How much profit? You want to double your money? Then that £5 investment you made in the one surviving enterprise has to grow by a factor of 40, not 20.
That's not going to happen overnight. Suppose your investment grows at the rate of 10% p.a. How long will it take to be worth £200? Answer, something between 38 and 39 years. 38.70394 years to be precise, but there's no point being precise because you have clearly starved to death a long time before merely doubling your money.
38 is pushing it. Let's say you can afford to lock up your money for five years. How fast does the value of the investment have to grow? Answer, at the rate of 109.1279% p.a. Every annum. For five years. After tax. And after costs.
It's not easy finding investments that can do that. And even if you find one, your peers in the venture capital business will laugh at you for only doubling your money. But never mind their laughter, let's say that you're a pretty grounded sort of investor and that, for you, net doubling your money in five years is enough.
Time to take an example.